Centro chief confident of US asset sale

Centro
chief Robert Tsenin has discounted the possibility the property giant will be forced to get shareholder support for a $9.4 billion sale of its US assets.

The sale of the US portfolio is the first stage of a massive restructure of the heavily indebted global shopping centre owner.

The second proposed phase involves amalgamating Centro’s remaining Australian assets into a new listed trust with a new board and chief executive.

The process has hit turbulence from a group of disgruntled shareholders who are opposed to the sale and are demanding the right to vote on it.

They have urged the stock exchange to intervene and order a vote.

Mr Tsenin said it was unlikely the Australian Securities Exchange would order one.

“You can imagine that for a deal of this size, we would have gone through all of the appropriate protocols from ensuring that it was in the commercial best interests of our investors through to the governance issues."

However, Centro said last month that a shareholder vote would be required for the second stage of the debt restructure.

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Under that plan lenders will swap debt for equity as Centro’s listed parent – which has negative $1.6 billion in equity – is wound up. That will give the lenders a large stake in the new listed fund.

But only $100 million in equity will be left in the Centro shell, to be divided among all other creditors and ordinary shareholders, who may end up with a only a few cents return on each share, at best.

Mr Tsenin is talking up the deal because the alternative, of sending Centro into liquidation, would leave shareholders with nothing.

Mr Tsenin rejected speculation that the lenders were preparing to bypass shareholder resistance, by setting up a mechanism to liquidate Centro’s assets.

“From day one, the lender groups always had the possibility of considering alternatives such as liquidation. But that is not the basis of the negotiations to date. We are working towards a consensual outcome."